Catherwood and Sullivan lowered their full-year estimate on FFO per share by a penny to $2.65 “to reflect a lag between 4Q16 sales/contributions and redeployment of proceeds in 2017.” Their 2018 estimate of $2.76 per share represents year-over-year FFO growth of 4.2%.

Barclays Capital analysts noted Tuesday that Prologis' report represented the start of Q1 earnings season for the REITs in their coverage. Of the industrial sector's outlook on the whole, they wrote, “With occupancies at record highs, landlords have significant pricing power. New construction is rising. That said, projects are generally build-to-suit, leasing quickly and generally consistent with demand.”

Prologis Prologis

SAN FRANCISCO—Global logistics giant Prologis on Tuesday reported first-quarter core funds from operations of 63 cents per diluted share, up from 61 cents a year ago and in line with or slightly exceeding analyst projections. The REIT increased its guidance on the midpoint for full-year net earnings as well as core FFO, respectively by 13 cents and 10 cents per diluted share.

“We started the year with excellent momentum as housing, construction and e-commerce drove demand for our facilities, leading to the ninth consecutive quarter of double-digit rent change on rollovers,” says Prologis' chairman and CEO, Hamid R. Moghadam. “While the national vacancy rate ticked down slightly and fundamentals in our US markets are solid, speculative construction activity increased in several markets in the quarter.”

He adds that Europe continues to emerge as “a bright spot for us,” with market conditions there strengthening, “even ahead of our expectations. Our strategy to own top-quality buildings close to the end consumer has never been more important. The combination of our significant embedded rental upside, the build-out of our land bank and continued recovery in Europe will further extend the growth cycle for us.”

BTIG Research analysts last week cited European trends as favorable to Prologis in reiterating their “buy” rating on the REIT's shares. “Prologis should continue to benefit from the secular trend towards online retail and the growth of modern logistics networks in Europe,” wrote BTIG's Thomas Catherwood and James Sullivan.

Catherwood and Sullivan lowered their full-year estimate on FFO per share by a penny to $2.65 “to reflect a lag between 4Q16 sales/contributions and redeployment of proceeds in 2017.” Their 2018 estimate of $2.76 per share represents year-over-year FFO growth of 4.2%.

Barclays Capital analysts noted Tuesday that Prologis' report represented the start of Q1 earnings season for the REITs in their coverage. Of the industrial sector's outlook on the whole, they wrote, “With occupancies at record highs, landlords have significant pricing power. New construction is rising. That said, projects are generally build-to-suit, leasing quickly and generally consistent with demand.”